The overheated real estate market in the last couple of years created the prefect environment for mortgage fraud. I believe in the next eighteen months this issue will surpass foreclosures as the largest remnant of the real estate bubble. Identifying loan fraud is easy. Look for inflated appraisals, mortgage interest rates puffed based on biased credit scores, and inflated closing costs to the buyer. Remember, making a false statement to a mortgage lender is a crime. Run don't walk when someone asks you to do something that doesn't seem legit. It's not worth risking everything to purchase a home. Here are some quick tips to determine if mortgage fraud is going on in the purchase of your home. -All concessions to buyer must show up on the settlement statement. Nothing can be paid outside of closing or escrow. -If you are not going to owner-occupy a property, you must disclose this to the lender. Even if it means you need a larger down-payment or will pay a higher interest rate. Shop around for the best deal. -If someone suggests a contract stating one price for the lender and another showing the actual price, say no, this is mortgage fraud, pure and simple. Each transaction should have only one contract to purchase. -Don't have a friend or relative falsify a gift letter. If it's really a loan, than that's how it should be disclosed to a lender. -All second mortgages must be disclosed to the first mortgage holder. -Don't allow anyone to falsify statements on your loan application about debt owed, child support, or employment. And don't do it yourself, these will be verified by any lender. -Flipping properties can induce an fraud investigation. Verify that all appraisals and documents are done according to legal guidelines. -Report mortgage fraud to the Federal Bureau of Investigation. |
